Investors take shine to diamonds online

Investors can now get their cut of diamonds more easily, with the opening of the first online exchange for the gems.

The Dealers Organisation for Diamond Automated Quotes (Dodaq), launched in Antwerp, offers a two-way auction for traders, giving a platform for electronic transactions in polished diamonds with real-time pricing.

Chief financial officer Alex Fray said institutional and private investors and people from all parts of the diamond industry have been rushing to use the service. Buyers have previously faced a hefty sales tax but the jewels are stored in a tax-free zone, making it cheaper to trade.

Demand for diamonds has been hit by the global downturn, with producer De Beers recently saying it does not expect a recovery until Christmas next year at the earliest, Dodaq is optimistic.

"The trend is for growing demand from emerging markets. Over the medium term, demand is expected to outstrip supply," Fray said.